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Question 2: (15 marks) (B1, C2) Bahrain Manufacturing Company employs a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred
Question 2: (15 marks) (B1, C2)
Bahrain Manufacturing Company employs a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:
- Direct materials requisitioned during the month:
Job 11 $40,000
Job 22 32,000
Job 33 48,000
$120,000
- Direct labor incurred and charged to jobs during the month was: (Direct labor wage rate was $10 per hour).
Job 11 $60,000
Job 22 50,000
Job 33 40,000
$150,000
- Manufacturing overhead was allocated at $30 per direct labor hour.
- Actual manufacturing overhead costs incurred during the month amounted to $140,000.
- Job 11 consisting of 500 units and Job 33 consisting of 400 units were completed during the month.
Instructions
- Prepare journal entries to record the above transactions. (9 marks)
- Compute the unit cost of Jobs 11 and 33. (3 marks)
- Calculate the over/under allocated balance and prepare the adjusting entry if the difference material (important) and the ending balances were cost of goods sold 50,000; finished goods 40,000 and work in process 10,000. (3 marks).
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